Armstrong Says Patch Revenues Will Reach $40 Million To $50 Million In 2012

AOL’s local news network of blogs, Patch, will reach $40 million to $50 million in revenues this year, AOL CEO Tim Armstrong told analysts during a conference call this morning.

AOL invested $160 million in 2011 and at least another $50 million or so this year, so the project remains deeply unprofitable.

Armstrong says Patch costs are going down, but revenues will probably have to cross $150 million to make the whole thing profitable.

During the call, Armstrong said the secret to Patch’s ad revenue growth is that AOL is starting to sell ad inventory to national advertisers, particularly banks and carmakers, which Armstrong says spend 50% of their budget on national advertising, and 50% of it on local.

Armstrong said Patch traffic was up 14% quarter-over-quarter, and time spent on Patch sites was up 19%.